Exposing the international consultancies

I read three journals – 2 dailies and one weekly – The Guardian and Der Spiegel online and Le Monde whenever I can find it in a shop (easier in Romania than in Bulgaria) by virtue of the latter’s thin, sensuous paper (I deeply regret the disappearance of its copious footnotes!). Yesterday The Guardian invited me to take part in a survey – I suspect to explore the commercial possibilities of erecting a paywall to protect some of its content. I was, however, happy to participate in the survey since I have become increasingly disillusioned with the superficial (if not biased) nature of some of this famous liberal paper’s recent drift and wanted a chance to say something about my misgivings. I recognise the glorious role the paper had played in unmasking the machinations and manipulations of the Murdoch Empire’s media empire but, for my money, it has played a most curious (and unacceptable) role of "the establishment" in the Julian Assange affair.  

In filling out the questionnaire I duly took the chance to sound off about this – and also about the overly New Labourist views of correspondents it uses such as Polly Toynbee. 

But, after the article she has published today, I take that back and offer my apologies. Her article gives great coverage to a long-overdue attack on the criminal role of International Financial Consultancies in government

Westminster is rarely a palace of pleasure, but Thursday brought the magnificent spectacle of Margaret Hodge walloping the big four accountancy firms for their role in helping companies deprive the Treasury of taxes everyone else has to pay. Four heads of tax – at PWC, Ernst & Young, Deloitte and KPMG – wriggled and obfuscated, hiding behind the polite euphemisms of their trade. Never say avoidance or, God forbid, evasion – but call it "tax planning" and "tax efficiency".
As she came at them from all sides, Hodge and the astute MPs on her public accounts committee ripped off the accountants' veil of respectability. She waved a monstrous map showing the tax avoidance device one of the four had created for a company operating with circles of subsidiaries sited in off-shore havens: "That stinks!" she said. Yet there the four sat piously deploring "complexity" in a tax system that keeps adding volumes to the code just to chase down their devilish loopholes.
When the burglar is unscrewing your window locks, would you pay him a fat fee to clean your windows while he's at it? Yet that's what the government does. Last year these four firms said they earned some £400m from the state, and they help to denude this same state of the tax that pays them. But far worse, the government has invited the burglar in to be consulted on the best kind of locks for the future. Now the old lag is in the pub selling the pin code to the locks to all his burglar friends.

And I now see that it was an article of Polly Toynbee's that I extensively quoted from in one of my posts about the Murdoch Empire last year. I think I've absorbed too many of the wisecracks on Craig Murray's (otherwise admirable) website about "The Guardian" newspaper!!

Consultancy....again

Eighteen months ago I highlighted a story about the English health service spending 300 million in the previous year on consultancy companies – equivalent to the pay of 10,000 nurses. This was just the tip of the iceberg – with spending on consultants having got out of control under New Labour. A 2006 book on the subject suggested that spending had gone up 10 times under them. Four reasons for this –
• New Labour’s initial suspicion of the senior civil servants who had served a radical right Conservative Government for 18 years
• a naivety about the implementation of complex IT projects (and lack of coordination on them)
• The curious combination New Labour had of managerialism and social engineering
• the jobs and connections many of the new Ministers had had with big consultancies when in opposition.

A story in today’s Guardian indicates that in New Labour’s final years, the spending increased by a factor 50 to one in one department. The Ministry of Defence apparently spent only 6 million pounds a few years ago on consultants but its bill came in at 297 million in 2010. Curiously, The Guardian tries to put the blame on the Coalition Government but, on my arithmetic, 2009.2010 was still on the New Labour watch. What will be interesting will be to see the figures for 2011 – when the present government started its programme of reducing defence manpower by 60,000.
The paper did report a few days back that government departments have spent 30 million pounds hiring temporary staff to cope with the shortage of staff they are experiencing after the redundancies of the past year.

Exactly a year ago I drew attention to the publications of the National Audit Office (NAO) on the subject. The NAO is supposed to be the nation’s financial watchdog but started to look at the issue of consultant use only in 2005. Since then it has issued various reports exposing the bad practice and issuing both recommendations, guidelines and the inevitable “toolkits”. Their last report (issued in October 2010 for the new government) gives a useful overview of issues - and one of the annexes to the significant 2007 report is a helpful set of guidelines on increasing the commitment of clients and consultants during the projects.
It’s sloppy journalism on the Guardian’s part not to give this sort of background – and follow it up eg by asking whether the NAO has been asking what use departments have been making of their guidelines.
For those interested in the consultancy business, a more analytical study of the different types of consultancy has been done by a Canadian think-tank.

On the subject of slack journalism, it is a blog in Paris which tells us here in Bucharest that several Romanians have been on a hunger strike in an attempt to get some transparency on the crimes committed during the communist era. Doru Maries is near death - having been on hunger strike for 90 days. The local media have apparently given no coverage to this.

The Blind leading the blind?

Regular readers of my blog will be aware that I view specialization as a virus which has contaminated universities and the professional community and condemns us all to a constant reinvention of the wheel. Hard-won insights in one field of endeavour have to be rediscovered in another – often in a different language. I drew attention to this in the closing section of my paper to this year’ s NISPAcee Conference – quoting from the OECD’s Network on Governance’s Anti-corruption Task Team report on Integrity and State Building that

As a result of interviews with senior members of ten donor agencies, it became apparent that those engaged in anti-corruption activities and those involved in the issues of statebuilding and fragile states had little knowledge of each other’s approaches and strategies

.“Fragile states” and “Statebuilding”, for example, are two new phrases which have grown up only in the last few years – and “capacity building” has now become a more high-profile activity. Each has its own literature and experts. Those who have been in the game of organisational change for several decades draw on an eclectic range of disciplines and experience – are we to believe that these new subjects represent a crystallisation of insights and experience??
All I know is that few of those in the intellectual world I have inhabited for the past 20 years – the consultants and writers about institution-building in post-communist countries – seem aware of the development literature and the various critiques which have been developed of aid over the past few decades – and which has helped give the recent stuff about capacity development the edge it has. Those who work in my field seem to be a different breed from those who work in “aid”. I say “seem” since I have seen no study of who gets into this field – with what sort of backgrounds (let alone motivation). Whereas there are several studies of the demand side eg a 2007 report from the European Centre for Development Policy Management - Provision of Technical Assistance Personnel: What can we learn from promising experiences whose remit was to gain a better understanding of the future demand for technical assistance, to relate that to past experience and to recommend how TA personnel can best be mobilised, used and managed in the future to strengthen national capacity.
Those who work in my field seem to be more pragmatic, more confident, more “missionary” in the modernist (rather than post-modernist) approach taken to institution building – and, dare I say it - more “mercenary” in motivation than those who have traditionally taken to “development work”.

These musings were prompted by Owen Barder’s development blog (one of about three blogs about development which is always worth reading (Duncan Green, Simon Maxwell and Aid on the Edge of Chaos are three others).
Not only does Barder have a blog – but, I have discovered, a series of podcasts (Development Drumbeats) in which he talks with various characters about development issues. Such a nice initiative – some of the podcasts come with a paper and some even with a transcription!
Barder’s latest discussion was with Tony Blair. Now Bliar is hardly my favourite person. As UK PM for a decade, he not only carried on but deepened the Thatcher agenda of marketisation – concealing a lot of it in a shallow rhetoric about “modernisation”. He has always talked the good talk – and he is on good form in this discussion when he reveals some of the lessons he has learned from the work he has been doing on Governance in three African States – Rwanda, Sierra Leone and Liberia. Criticism of the supply-driven approach (eg training of civil servants) is the new mantra of the TA industry - and Bliar duly echoes that mantra, suggesting that his approach is different in four respects.
• First that he personally works with the political leaders to ensure that the process of change is demand-driven (interesting that the EC’s Backbone Strategy didn’t mention such an approach);
• secondly the ruthless approach to priorities (focus on a few manageable things), working to deliver prioritised programmes – learning from doing.
• He mentions a third factor - his technical team being resident and coaching – but this for me is not all that different from a lot of TA does.
• The final factor is different - getting „quality” private sector investment (a good Bliar flourish that - it could hardly be „rubbish”!)

Coincidentally it was precisely this point about the need for political demand which I was trying to build earlier in the month to the final version of my NISPAcee paper. And the issue of ruthless prioritising – and learning from doing are close to my heart – as can be seen in the final Discussion paper I left in 2008 to my Bulgarian colleagues (entited "Learning from Experience”. But relying on a Bliar approach would involve cutting back dramatically on interventions. And, by definition, his work is not transparent – is not subject to monitoring or evaluation. The write-ups which will doubtless come will be laudatory – and not, I bet you, governed by the normal canons of analysis!

Note to myself - this entry has meandered a bit – I should return to the theme of the profile of the IB expert.
Note to reader – In January I had a short post about some reports on the use of consultants To that list should be added this interesting paper which gives a typology of external advice

Chinese administrative reforms in international perspective

Exactly a year ago I was preparing to fly to Beijing – to start a major new project but I was not looking forward to the experience. Alarm bells had rung in the summer when I was first invited to go with the bid – and I told the contractors that neither the scale of the city nor the repressiveness of the regime appealed to me. Nor could I see what my experience could bring to the Chinese. What little I knew of the Chinese context suggested that it was so very different from anything I was used to.
But the temptation of seeing China was too great – and I agreed to go with the bid – not really expecting to win. We did – and the alarm bells started up again when I went to visit the contractors in November and began to realise what a gigantic bureaucracy they (let alone the EU) were! And that they wanted to offload virtually all the financial management to me as Team Leader. I prefer to focus on professional issues and let the contractors deal with finances.
I tried to put my foot down – but was still subjected to a lot of technical briefing about (expert) procurement and payment procedures which frankly bored the pants off me. When, 2 months later, we got to Beijing we were taken to the contractor’s huge offices there and subjected to the same briefing over several days with no Chinese counterpart in sight – at which point I began to realise that what was supposed to be a support system to us was in fact exactly the opposite. We were paying the local contractor’s branch office for services which were at best perfunctory - but expected to pass to them all project papers and information in a complex and time-consuming intranet system!
This was one of three factors which persuaded me to draft my resignation after only one week – the other two issues being the claustrophobia I felt in the dense mass and materialism of Beijing; and the failure of the Chinese to appoint anyone for us to work with. I had faced some difficult challenges in 7 years in central Asia (even a revolution) and a year in politicised Bulgaria - and survived and succeeded. The other key expert resigned a few months later (there were only two of us for a rather ambitious project which was another warning sign I had ignored!)
On my return home in March I took time to try to understand why I had so quickly felt so alienated on this project. Lost in Beijing was the result - in which I identified 17 reasons for my decision!!
I shared it with the contractors and some colleagues – but feel I should now put it in the public domain as a contribution to the gap in literature about this multi-billion industry which I identified recently. The paper has a few comments at the end about what I learned about public services in China – and these are developed in a separate briefing and reading and web references which I’ve also put on the website for anyone who suddenly finds themselves involved in discussions with the Chinese about issues relating to administrative reform! It’s called Chinese administrative reform in perspective - a revisionist briefing (May 1 update)and contains some provocative stuff about so-called western democracy.

Boffy has another good read on present economic issues.

Good advice

"I always pass on good advice", Oscar Wilde has a character say - Ït's the only thing to do with it".
The use of consultants by British Governments over the past 15 or so years had become an increasing scandal – with annual spending running at well over a billion pounds. One positive result of the austerity measures, however, is a significant scaling back. But the big consultancies have become hooked on the connection and the money – and can’t kick the habit. So now they are offering to do the work for free! At least one of them - KPMG - has offered to work for a year on what it calls a charitable basis!
Three factors contributed to New Labour fascination with such external “advice”. First the employment of quite a few leading Labour MPs by the Big Consultancies in the 1990s when Labour was in opposition; then the natural suspicion a new Government has of the civil servants who had (by 1997) faithfully served another party for 13 years. And, finally, the social engineering tendencies of even New Labourites and the 1999 modernisation programme they pursued. For some reason The National Audit Office (NAO) – which is supposed to be the nation’s financial watchdog – started to look at the issue of consultant use only in 2005 – but has, since then, issued various reports exposing the bad practice and issuing both recommendations, guidelines and the inevitable “toolkits”.
Their most recent report( issued in October for the new government) gives a useful overview of issues - and one of the annexes to the significant 2007 report is a helpful set of guidelines on increasing the commitment of clients and consultants during the projects.

Technically I have been a consultant for the past 20 years – but hate the term. I was about to say they are parasites (they are) but have just thought of an even better definition which I’ve now placed in my glossary – “a con-man who operates like a sultan”. Not only are the two separate words retained in the definition – but the Sultanic parallel covers both the rewards and airs of consultants and the way they expect the client to jump to their orders in data-collection etc.
Of course, the consultancy work I do in programmes of “Technical Assistance” in transition countries is of a different nature than that in Western Europe. And the giveaway is the use of terms – “beneficiary” rather than “client”. A client is assumed to be in control (although the NAO reports show how little British Ministries actually are in control!) – whereas a beneficiary is a passive recipient of a project he may neither want nor need! After all, he doesn’t pay for it (it’s a freebie) – and has played little part in drafting its specifications! Here is another example of a system needing a proper balance between its demand and supply sides - an issue which "donors" have recognised in recent years with their talk of demand-driven strategies (The OECD Development Assistance centre issues interesting papers from the donor network it supports - see, for example,a recent paper which summarises some approaches and draws out some lessons). For some people (not only William Easterley), however, the only way out of these dilemmas is to remove the donors and donations.
The amount of money spent on consultancy (by Governments on their own structures and by international bodies on Technical Assistance) surpasses 100 billion euros (accroding to a 2006 OECD report) and yet how little has been written about the whole industry - let alone by anyone in it! I'll try to track down some references for a future post. And given the number of consultants in the world, isn't it about time that novels and satires were written about this??

I woke up this morning in the middle of a dream about the process of deliberation (I kid you not) which set me thinking about the lack of systemic perspective in so much of the work we are asked to do to improve the deliberative capacity of governments in transition countries. I will develop this tomorrow.......